What Should An Unmanaged Earnings Distribution Look Like?
In asserting that the number of firms reporting small profits is abnormally high, thus suggesting that earnings management has taken place, accounting researchers assume that the distribution of reported earnings should be smooth for unmanaged earnings. This has never in fact been demonstrated. This article seeks to confirm this assumption through a laboratory experiment, and also sets out to identify the general distribution pattern to be expected for unmanaged earnings. Normal distribution does not appear to be a good fit. The study's results also highlight the existence of downward management of earnings by firms with higher-than-average profits.
|Date of creation:||08 Jul 2010|
|Date of revision:|
|Publication status:||Published - Presented, International Federation of scholarly associations of management conference 2010, 2010, Paris, France|
|Note:||View the original document on HAL open archive server: http://hal.archives-ouvertes.fr/hal-00594838/en/|
|Contact details of provider:|| Web page: https://hal.archives-ouvertes.fr/|
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